The Pound exchange rate began Monday’s European trading above 1.40 against the US Dollar (GBP/USD) and approaching the 1.14 mark versus the Euro (GBP/EUR). Sterling has been offered some support from hawkish Bank of England (BoE) comments regarding interest rates and some positive UK economic data.
Last week the Pound gained some support when BoE Governor Mark Carney and Chief Economist Andy Haldane discussed interest rates. Haldane is of the opinion the bank needs to act preemptively and not wait until it’s too late to hike interest rates.
Meanwhile, Sunday saw Deputy Governor Dave Ramsden make some interest rate statements of his own. He told the Sunday Times:
‘Relative to where I was, I see the case for rates rising somewhat sooner rather than somewhat later.’
Ramsden can often be seen as a dovish member of the central bank’s Monetary Policy Committee (MPC) and so his hawkish comments can have a strong impact on the pound’s movement.
Monday has also shown that UK Mortgage Approvals have risen from their four-year low to come in at 40,117 in January, following December’s 36,085 reading.
So far in Monday’s session, the Pound exchange rate has jumped to highs of 1.4069 versus the US Dollar (GBP/USD) and 1.1399 against the Euro (GBP/EUR). There’s a host of data and events taking place this week which could influence the GBP/EUR and GBP/USD exchange rates further, such as central bank speeches and highly influential inflation figures.
On Monday European Central Bank (ECB) President Mario Draghi is due to speak in Brussels, followed by new Federal Reserve Chair Jerome Powell testifying to the House Financial Services Committee on Tuesday. Also out on Tuesday will be German inflation data, and the US Advance Goods Trade Balance, Durable Goods Orders, and Consumer Confidence numbers. Wednesday will continue with the Eurozone Consumer Price Index (CPI) and the US Gross Domestic Product (GDP) number.